THE TICKER

Sen. Elizabeth Warren (D-Mass.) will take the debate stage in Houston tonight with the political world focused on her ascendant candidacy — and Wall Street increasingly nervous about what it could mean for the industry’s bottom line. 

But as the financial sector begins to weigh its potential tab from a Warren presidency, a more practical question is arising: Does the candidate known for her plans have a plan to advance them through a GOP Senate if she makes it into the White House?

Assuming Senate Republicans hold onto their majority in the 2020 elections, Senate Majority Leader Mitch McConnell (R-Ky.) has already proved capable of turning his chamber into a graveyard for progressive legislation. What’s more, he could make it exceedingly difficult for Warren to fill key administration posts and thereby advance her agenda through rulemaking. Executive nominations, under current Senate rules, can be approved with 50 votes.

Warren’s agenda is both regulatory and legislative. Her plans to institute a wealth tax and remake corporate boards to reflect worker and community input, for example, would both need to pass Congress — an unlikely outcome even if Democrats claw out a Senate majority. 

Her proposals to, in her words, “reverse the Trump-era weakening of rules on capital, liquidity, leverage, and resolution-planning for big banks” could advance without lawmakers’ approval — though that proposition would get dicier if McConnell moves to deny floor voters to her nominees. In that case, Warren could appoint those denied confirmation to serve in an acting capacity, a gambit President Trump has used widely, but it could put decisions those officials make on tenuous legal footing. 

Warren’s campaign didn’t respond to a request for comment. But the candidate gave some insight into how she’d approach getting her nominees confirmed in a GOP-controlled Senate  in the first Democratic presidential debate. “Short of a Democratic majority in the Senate, you better understand the fight still goes on,” she said in June. “It starts in the White House, and it means that everybody we energize in 2020 stays on the front lines come January 2021. We have to push from the outside, have leadership from the inside, and make this Congress reflect the will of the people.”

That is, Warren couldn’t rely on procedural maneuvers to fight fire with fire. And in the absence of that option, she’d seek to marshal her voters to pressure Senate Republicans. 

The circumstances were inverted, but Warren already has demonstrated her ability to sway a presidential appointment by creating a grassroots groundswell: Back in 2015, she led liberals on a successful charge to sink then-President Obama’s choice of Wall Street banker Antonio Weiss for the No. 3 post at the Treasury Department. 

And she has made a mantra of the Reagan team’s maxim that “personnel is policy.” 

And as a student of the federal bureaucracy and the power of seemingly obscure jobs in it to shape high-stakes policy, she doubtlessly has strong views about the profiles she would nominate for the administration’s Senate-confirmable positions

“How do you get that personnel in there?” Compass Point’s Isaac Boltansky asks. “I’m of the view that we would see the cabinet-level folks through confirmation. Everything else would move at a snail’s pace, and I don’t know of any procedural mechanism for her to change that… It’s going to be tough to get assistant secretaries confirmed.”

Boltansky said he seen a noticeable uptick in questions from Wall Street clients anxious about what a Warren administration would bring.

This for example is from Seawolf Capital cofounder Porter Collins: 

Warren tweeted this Tuesday in response to a CNBC segment about industry executives growing nervous about her candidacy:  

Pointing to the challenge she would likely face from divided government, Boltansky said he can “make a coherent argument why the financial services industry’s greatest nightmares won’t be turned into policy reality… I do believe it.”

Likewise, Capital Alpha president Charles Gabriel says, “Focusing on the difficulty of moving her agenda is something that is going to be helpful in getting people not to commit seppuku as she continues to ascend.”

MARKET MOVERS

— Trump says Fed should cut to zero or below: “[Trump] escalated his attacks on the Federal Reserve on Wednesday, demanding that it slash interest rates to zero ‘or less’ so that the federal government can refinance the public debt that has ballooned during his administration,” my colleagues David J. Lynch and Taylor Telford report.

“The president has repeatedly complained that the European Central Bank’s use of negative interest rates to spur growth tilts global markets against U.S. companies. But the comments marked his first call for the Fed to embrace similar emergency steps and were at odds with his customary boasts about the strength of the U.S. economy … The last time the Fed cut rates to zero was during the Great Recession, and it has never adopted negative rates, even during the 1930s when one-quarter of the labor force was idle. Despite Trump’s impatience with the central bank, there is little sign that current interest rates are hindering the economy.”

Here was Trump on Wednesday calling Fed officials "boneheads": 

Such a move could backfire, CNN Business's Matt Egan writes: "There is a growing chorus warning that the Bank of Japan and European Central Bank's subzero regimes have backfired. Critics and some new academic research argue these unorthodox policies are crushing banks, keeping a lid on inflation and failing to juice growth. Worse, they harm savers and retirees hoping to earn safe returns in bonds."

The NYT's Jeanna Smialek explores other practical and political hurdles here

Draghi's big decision day. Bloomberg's Yuko Takeo and Piotr Skolimowski: "Mario Draghi is embroiled in one of the most contentious policy meetings of his European Central Bank presidency as he prepares to ramp up monetary stimulus again despite skepticism from the euro area’s biggest economies. The mood is expected to be tense on Thursday when the 25-member Governing Council discusses how to respond to fading growth and inflation, according to officials who spoke on condition of anonymity. The first day of the meeting on Wednesday, when the ECB presents economic scenarios, was difficult and longer than usual, with an awareness that market expectations for action are high."

TRUMP TRACKER

TRADE FLY-AROUND:

Trump delays tariff increase for two weeks: "[Trump] said on Twitter on Wednesday night that he would delay by two weeks the next increase in tariffs on Chinese goods as a 'gesture of good will' to advance trade talks that have made little progress for months," my colleagues David J. Lynch and Anna Fifield report.

"The president acted several hours after a conciliatory Chinese move to grant 16 U.S. products a one-year exemption from Beijing’s retaliatory tariffs. In a pair of tweets, Trump said he delayed his scheduled Oct. 1 increase at the request of China’s chief trade negotiator, Vice Premier Liu He, to avoid imposing the tariffs as the People’s Republic of China celebrated its 70th anniversary."

— Lighthizer responds to Dems on USMCA: "U.S. Trade Representative Robert Lighthizer on Wednesday formally responded to House Democrats’ concerns about the new North American trade agreement, marking a step forward in negotiations between the Trump administration and Capitol Hill," Politico's Megan Cassella reports.

"Sending formal language to Democrats on Capitol Hill will provide a boost to stalled negotiations between Lighthizer and the nine-member USMCA working group, which House Speaker Nancy Pelosi has tasked with making changes to the trade deal to reflect the party’s priorities."

Fact Checker
President Trump's numbers are overblown, unsupported or illogical, experts say.
Salvador Rizzo

TRUMP WATCH:

— Trump rules out going around Congress on capital gains: "[Trump] told his advisers on Wednesday that he doesn’t plan to try to bypass Congress and lower capital-gains taxes by indexing gains to inflation, according to three people familiar with the matter,” the Wall Street Journal's Andrew Restuccia and Kate Davidson report.

“Mr. Trump delivered the message during an afternoon White House meeting on the capital-gains proposal. The idea has been under discussion in the White House for months and has divided Mr. Trump’s aides, with some warning privately that it could cost him politically ahead of the 2020 election, the people said.”

… And moves to ban flavored e-cigarettes: “Trump administration officials, alarmed by new data showing a huge jump in vaping by young people, said they are moving to ban most flavored e-cigarettes, a major development that could result in sweeping changes in the sprawling market,” my colleague Laurie McGinley reports.

“The administration’s move comes as health officials across the country investigate more than 450 cases, including six deaths, of lung disease linked to vaping. Many patients have reported using cannabis-related products, but authorities have not ruled out any specific type of vaping. With the picture still murky, critics have seized the moment to press for tougher regulation of conventional e-cigarettes, which come in sweet and fruity flavors that have been favored by many young people.”

— Treasury admits error on oligarch list. But how it happened is crazy: “The U.S. Treasury Department issued a letter Wednesday stating that Valentin P. Gapontsev, an 80-year-old laser physicist who became a U.S. citizen a decade ago, does not belong on a list of Russian oligarchs that Treasury admitted in court to having cribbed entirely from a 2017 Forbes Magazine article,” my colleague Steven Mufson reports.

“Gapontsev, who has built a $6.8 billion company called IPG Photonics based in Oxford, Mass., was No. 27 on the list of 96 Russians that Treasury gave Congress when lawmakers were eager to retaliate for Russian interference in U.S. elections. Gapontsev has said that he never belonged on the list and that he had feared that Congress might use the list as a tool for applying pressure on the Kremlin. He said that unlike the Russian oligarchs, he built his company over three decades based on its advanced laser technology, not Kremlin connections.

Trump administration officials are squeezing biofuel and oil refining executives to agree to a plan to bolster corn-based ethanol and soy-based biodiesel. In a meeting at the White House on Wednesday, Trump’s economic advisers gave biofuel producers a Friday deadline for providing ideas on a possible compromise.
Bloomberg
POCKET CHANGE

— Juul’s D.C. spending didn’t get it much: “Juul Labs has spent millions of dollars on lobbying, hired high-profile Trump administration officials, and blanketed Washington with ads touting its efforts against underage vaping,” Politico’s Theodoric Meyer reports. “None of that was enough to keep [Trump] from moving to ban flavored e-cigarettes on Wednesday, delivering a blow to the dominant vaping company and its rivals.”

“Juul hired its first Washington lobbyists in 2017 and rapidly ramped up its spending, flush with cash after the tobacco giant Altria spent $13 billion to acquire a 35 percent stake in the company last year … The vaping company shelled out nearly $2 million on lobbying in Washington in the first half of this year alone, according to disclosure filings. Its two dozen lobbyists include former Sen. Don Nickles (R-Okla.) and former Democratic and Republican congressional staffers of both parties. The company’s PAC has also written nearly $200,000 in checks to candidates and PACs affiliated with both parties, according to campaign finance disclosures.”

— Purdue Pharma reaches deal in opioid suits: “Purdue Pharma, manufacturer of blockbuster painkiller OxyContin, reached a tentative settlement Wednesday with 23 states and more than 2,000 cities and counties that sued the company over its role in the opioid crisis, according to attorneys involved in the deal,” my colleagues Lenny Bernstein, Aaron C. Davis, Joel Achenbach and Scott Higham report.

“The executive committee of lawyers representing cities, counties and other groups in a federal lawsuit against Purdue and other drug companies is recommending the deal be accepted. But more than half the state attorneys general in the U.S. balked, saying they planned to continue pursuing the company and its owners, the Sackler family.”

  • The terms: “... The Sacklers would relinquish control of Stamford, Conn.-based Purdue Pharma and admit no wrongdoing. The company would declare bankruptcy and be resurrected as a trust whose main purpose would be producing medications to combat the opioid epidemic. If the deal becomes final, it would be the first comprehensive settlement in the broad effort to hold drug companies accountable for their role in the opioid epidemic.”

— T. Boone Pickens dead at 91: “T. Boone Pickens, a shrewd, publicity-savvy Texas oil tycoon who helped usher in the era of hostile takeovers and corporate ‘greenmail’ in the 1980s, and who later became an influential voice on environmentally sound energy policy, died Sept. 11 at his home in Dallas,” Chris Power writes in The Post’s obit.

“Mr. Pickens — a distant relative of frontiersman Daniel Boone — was one of a handful of fearsome, high-stakes corporate raiders who helped define the Reagan-era boardroom scene and who set a raucous tone at shareholder meetings. He targeted companies he considered undervalued — mostly oil firms, including Gulf Oil Corp. — and bought conspicuous chunks of stock in the expectation that management, to keep control of the business, would pay a premium to buy it back.”

The nearly $37 billion offer from the Hong Kong exchange to buy its London counterpart faces tough odds. If sealed, it could transform turbulent markets in Asia and Europe.
NYT
It's not the first time that Apple has had a market cap over $1 trillion, but it comes a day after the company launched new iPhones.
CNBC
MONEY ON THE HILL

Execs call on Congress to curb gun violence. NYT's Andrew Ross Sorkin: "In a direct and urgent call to address gun violence in America, the chief executives of some of the nation’s best-known companies sent a letter to Senate leaders on Thursday, urging an expansion of background checks to all firearms sales and stronger 'red flag' laws. 'Doing nothing about America’s gun violence crisis is simply unacceptable and it is time to stand with the American public on gun safety,' the heads of 145 companies, including Levi Strauss, Twitter and Uber, say in the letter...

"The letter — which urges the Republican-controlled Senate to enact bills already introduced in the Democrat-led House of Representatives — is the most concerted effort by the business community to enter the gun debate, one of the most polarizing issues in the nation and one that was long considered off limits."

OPINIONS
Opinions
Her campaign finance promises are hypocritical.
Ed Rendell
CHART TOPPER

The current economic expansion is not only the longest on record. It is also the slowest. Oxford Economics chief U.S. economist Gregory Daco illustrates the phenomenon: 

DAYBOOK

Today:

  • The Financial Services Task Force on Artificial Intelligence holds a hearing on the future of identity in financial services.
THE FUNNIES

From The Post's Tom Toles:

BULL SESSION